The main legal point established in the judgment is that the owner of the goods travelling in a public carrier goods vehicle is not a gratuitous passenger and is required to be covered by insurance under S.95 of the Motor Vehicles Act. The judgment also clarified the expansive interpretation of the words 'third-party' in S.94 and the heading of S.96, and the significance of provisos (i) and (ii) to clause (b) of subsection (1) of S.95, and discussed the limits of liability under sub-section (2) of S.95.

Headnote:
Insurance - Motor Vehicles - S.95 of the Motor Vehicles Act - State Insurance Department v. Sosamma (1978 K.L.T.634), Nazeema v. Sebastian (1987 (1) K.L.T. 370), Oriental Fire and General Insurance Co. Ltd. v. G. Kaur (A.I.R. 1967 Punjab 486), Venguard Insurance Co. Ltd. v. Chinnammal and others (A.I.R. 1970 Madras 236), Channappa Chanavirappa Ketti v. Laxman Bhimappa Bajantri (A.I.R. 1919 Kant. 93), Nasibdar Suba Fakir v. Adhia and Company (A.I.R. 1984 Bom.1), Santra Bai v. Prahlad (A.I.R. 1986 Raj. 101 FB) - The court discussed the interpretation of S.95 of the Motor Vehicles Act and held that the owner of the goods travelling in a public carrier goods vehicle is not a gratuitous passenger and is required to be covered by insurance. The court also emphasized that the words 'third-party' in S.94 and the heading of S.96 must be construed in an expansive manner to refer to anyone other than the insured and the insurer. The court further clarified the significance of provisos (i) and (ii) to clause (b) of subsection (1) of S.95, and held that the insured is compulsory liable to take out insurance policy against any liability in respect of the death of or bodily injury to the owner of the goods travelling in the vehicle. The court also discussed the limits of liability under sub-section (2) of S.95 and ruled that the limit of liability in regard to goods vehicle is one lakh fifty thousand rupees in all.
Fact of the Case:

The claimant, a trader in paddy and rice, hired a public carrier goods vehicle for transporting paddy belonging to him. In the course of the journey, the vehicle collided with a parked lorry, and the claimant sustained injuries. The claimant filed a petition claiming compensation from the driver, owner, and insurer of the vehicle. The insurer contended that the claimant, being only a passenger of a public carrier goods vehicle, is not required to be covered under S.95 of the Motor Vehicles Act.
Finding of the Court:

The court upheld the claim of the claimant and awarded compensation, emphasizing that the owner of the goods travelling in a public carrier goods vehicle is not a gratuitous passenger and is required to be covered by insurance. The court also clarified the expansive interpretation of the words 'third-party' in S.94 and the heading of S.96, and the significance of provisos (i) and (ii) to clause (b) of subsection (1) of S.95. The court ruled that the insured is compulsory liable to take out insurance policy against any liability in respect of the death of or bodily injury to the owner of the goods travelling in the vehicle. The court also discussed the limits of liability under sub-section (2) of S.95 and ruled that the limit of liability in regard to goods vehicle is one lakh fifty thousand rupees in all.
Issues: Interpretation of S.95 of the Motor Vehicles Act, liability of the insurer for the owner of the goods travelling in a public carrier goods vehicle, significance of provisos (i) and (ii) to clause (b) of subsection (1) of S.95, and limits of liability under sub-section (2) of S.95.
Ratio Decidendi: The court emphasized that the owner of the goods travelling in a public carrier goods vehicle is not a gratuitous passenger and is required to be covered by insurance. The court also clarified the expansive interpretation of the words 'third-party' in S.94 and the heading of S.96, and the significance of provisos (i) and (ii) to clause (b) of subsection (1) of S.95. The court ruled that the insured is compulsory liable to take out insurance policy against any liability in respect of the death of or bodily injury to the owner of the goods travelling in the vehicle. The court also discussed the limits of liability under sub-section (2) of S.95 and ruled that the limit of liability in regard to goods vehicle is one lakh fifty thousand rupees in all.
Final Decision: M.F.A.No.58 of 1986 was dismissed, and M.F.A.No.328 of 1986 was allowed by increasing the total amount of compensation from Rs.26,400/- to Rs.30,000/- with interest and proportionate costs as directed by the tribunal. There was no order as to costs in the appeals.

Judgment :-

1. These appeals arise out of the judgment and award of the M.A.C. Tribunal, Ernakulam in O.P. (M.V.) No. 1352 of 1980. M.F.A.No. 58 of 1986 is the appeal filed by the insurer and M.F.A.No. 328 of 1986 by the claimant.

2. The claimant is a trader in paddy and rice. He hired a public carrier goods vehicle (lorry K.L.F. 8606) for transporting paddy belonging to him. He was earning his livelihood by purchasing and husking paddy and selling rice. In the early hours of the morning on 13-2-1980, in the course of the journey, the lorry collided with a parked lorry and the claimant sustained injuries. Alleging rashness and negligence on the part of the driver of the lorry, the claimant filed petition claiming compensation of Rs. 95,230/-from the driver, owner and insurer of the lorry. The driver and owner in their written statement denied rashness or negligence on the part of the driver and alleged that the parked lorry had no parking lights and there were iron rods protruding out and suddenly another lorry came from the opposite direction and to avoid collision, the driver of lorry K.L.F. 8606 swerved the lorry which hit the projecting iron rods. The insurer admitted existence of an act policy and contended that the claimant, being only a passenger of public carrier goods vehicle, is not required to be covered under S.95 of the Motor Vehicles Act (for short 'the Act'). The tribunal upheld the claim of the claimant and awarded Rs. 26,400/- as compensation and directed the insurer to pay the amount with interest and costs.

3. Learned counsel for the insurer contends that passengers cannot be carried in a goods vehicle for hire or reward and the owner of the goods is not a passenger for hire or reward nor a passenger travelling by reason of or in pursuance of a contract of employment as required in the second proviso to S.95(1)(b) of the Act and hence the Act policy cannot cover such a person.

4. We may notice at the outset that in State Insurance Department v. Sosamma (1978 K.L.T.634) this court held that where an employee or agent of the owner of the goods accompanies the goods in a goods vehicle, he does so in pursuance of contract of employment between him and his employer and is covered by the second part of the proviso aforesaid and the insurer under an act policy is liable. The same view has been reiterated in Nazeema v. Sebastian (1987 (1) K.L.T. 370). We find that other High Courts have taken the same view. See Oriental Fire and General Insurance Co. Ltd. v. G. Kaur (A.I.R. 1967 Punjab 486), Venguard Insurance Co. Ltd. v. Chinnammal and others (A.I.R. 1970 Madras 236), Channappa Chanavirappa Ketti v. Laxman Bhimappa Bajantri (A.I.R. 1919 Kant. 93), Nasibdar Suba Fakir v. Adhia and Company (A.I.R. 1984 Bom.1) and Santra Bai v. Prahlad (A.I.R. 1986 Raj. 101 FB).

5. So far as owner of the goods travelling in a public carrier goods vehicle is concerned, there is an observation in Nazeema's case (1987 (1) K.L.T. 370) approving the view taken by the Full Bench of the Rajasthan High Court in Santrabai v. Prahlad (A.I.R. 1986 Raj. 101) that he is not a gratuitous passenger and he travels pursuant to a contract, hire being the consideration, and insurer under an Act policy is liable. In the decisions in Channappa Chanavirappa Ketti v. Laxman Bhimappa Bajantri (A.I.R. 1979 Karnatak 93), T.M. Renukappa v. Fahmida (A.I.R. 1980 Karnataka 25), New India Assurance Co. Ltd. v. Nathiben Chatrabhuj (A.I.R. 1982 Gujarat 116 FB), United India Insurance Co.Ltd. v. Gangamma and another (A.I.R. 1982 Karnataka 261), Abdul Razak v. Sharifunnisan (A.I.R. 1983 Allahabad 400), and Oriental Fire and General Insurance Co. Ltd. v. Narayanibai (A.I.R. 1984 Orissa 43) it has been held that owner of goods travelling in goods vehicle is a passenger travelling for hire and is required to be covered by insurance. In Nasibdar Suba Fakir v. Adhia and Company (A.I.R. 1984 Bombay 1), Meesala Suryanarayana v. Goli Satyavathi (1979 A.C.J. 513 (AP) and Harishanka

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1989 Supreme(Ker) 324

Cases Referred (1)